Sudhir Sitapati and Vinay Sitapati shed light on how politics influences consumer behaviour

Predominantly in the B2C and D2C business, there are 4 P’s of marketing - price, place, promotion and product. However, more times than not, there is a another P that creeps its way into the consumption landscape - politics. The famous Sitapati brothers, Sudhir and Vinay are two perfect examples to shed some light on this topic. Sudhir, with decades of experience in the FMCG sector, currently the managing director and CEO of Godrej Consumer Products and Vinay, with his expertise in politics, a distinguished professor of political science and legal studies at Ashoka University talk to CNBC-TV18 elaborately about the interesting relationship between political landscapes and consumer behaviour.

India is gearing up multiple for state elections and the approaching central election. Thus, it becomes crucial to understand the correlation between political regimes, policies, elections and consumer purchase patterns.

Sudhir, noted a few interesting points. He said that the boom the FMCG sector experienced during the 90s (from 1991-2000) was largely due to supply chain advancements and major industrial deregulations. The major slow down in the sector was noted to be between the late 90s and 2005, owning to the increase in GDP as consumers’ preferences began changing. Subsequently, there was a lot of broad-based growth at the same time due to initiatives like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Nowadays, it is premiumisation, a trend that is influencing consumer behaviour.

The fifth P of marketing - politics, profoundly impacts the other four. It dictates what products reach us, how they should be priced, where will they be available and the kinds of promotional strategies that will be used.

Vinay mentioned that premiumisation is closely related to the reduced intervention of the state. Whether the state’s spends are directed towards capital expenditure or revenue expenditure will significantly impact consumer behaviour.

When India achieved independence in 1947, it was largely perceived as backward with the number of villages. It was believed that India needed a powerful state that would drive it towards modernity. However, there was an ideological shift post the 90s, backed by figures Manmohan Singh, PV Narasimha Rao, Deve Gowda and Narendra Modi. This shift led to a consensus that the state should simply play the role of a supporter rather than being the primary actor in the Indian economy. Vinay believes that it was this shift that pilots the premiumisation trend in the country today.